Milcrofton Util. Dist. of Williamson Cnty. v. City of Brentwood

• Decision Date: 30 April 2020
• Docket Number: Case No. 3:18-cv-00330
• Citation: 458 F.Supp.3d 757
• Parties: MILCROFTON UTILITY DISTRICT OF WILLIAMSON COUNTY, TENNESSEE, Plaintiff, v. CITY OF BRENTWOOD, TENNESSEE, Defendant.
• Court: U.S. District Court — Middle District of Tennessee

458 F.Supp.3d 757

MILCROFTON UTILITY DISTRICT OF WILLIAMSON COUNTY, TENNESSEE, Plaintiff,

v.CITY OF BRENTWOOD, TENNESSEE, Defendant.

Case No. 3:18-cv-00330

United States District Court, M.D. Tennessee, Nashville Division.

Signed April 30, 2020

Benjamin A. Gastel, Daniel P. Hull, Michael J. Wall, Branstetter, Stranch & Jennings, PLLC, Nashville, TN, for Plaintiff.

Mark Ennis McGrady, Farrar & Bates, Nashville, TN, for Defendant.

MEMORANDUM

WILLIAM L. CAMPBELL, JR., UNITED STATES DISTRICT JUDGE

Pending before the Court are Defendant's Motion for Summary Judgment (Doc. No. 25) and Plaintiff's Motion for Partial Summary Judgment (Doc. No. 29). Each party filed a response and a reply. (Doc. Nos. 39, 43, 46, 49). In addition, Defendant filed a Statement of Undisputed Material Facts (Doc. No. 27) to which Plaintiff responded (Doc. No. 45), and Plaintiff filed a Statement of Undisputed Material Facts (Doc. No. 29) to which Defendant responded (Doc. No. 40).

For the reasons discussed below, the motions are DENIED.

I. BACKGROUND

Plaintiff Milcrofton Utility District of Williamson County, Tennessee ("Milcrofton") is a water utility district created under the Utility District Law of 1937, Tenn. Code Ann. § 7-82-101, et seq . (Statement of Facts ("SOF"), Doc. No. 40, ¶ 1). Milcrofton has held loans from the United States Department of Agriculture, Rural Development, or its predecessor agency, continuously from April 5, 1973, to the present. (Id ., ¶ 3).

Defendant City of Brentwood ("the City") is a municipality located in Williamson County, Tennessee. The City owns and operates public water and sewer systems and is providing water service to two housing developments – Morgan Farms and Traditions¹ – that lie within the Brentwood city limits.² Milcrofton claims that these developments are within Milcrofton's service area. Morgan Farms and Traditions are located in the vicinity of Milcrofton's northern boundary – whether within or without is in dispute.³

Milcrofton Utility District was created by judicial order in 1971 and "recreated" by judicial order on October 10, 1975. See Order, In the Matter of: Milcrofton Util. Dist. , Rule No. 462 (Williamson Cty. Ct. Oct. 10, 1975) (Doc. No. 25-2 at DocID# 215-19). The Order establishes the "perimeters and boundary lines" of Milcrofton as follows:

[Beginning at] the point where Liberty Pike, I-65 and the southern boundary of the 8th Civil District of Williamson County intersect; thence eastwardly along the southern boundary of the 8th Civil District and following the same to the point where it comes closest to Clovercroft Road; thence following the 8th Civil District line northwardly and northeasterly to a point where the East boundary of the 8th Civil District and the South Boundary of the 15th Civil District intersect; thence eastwardly along the southern boundary of the 15th Civil District of Williamson County to the point where said southern boundary of the 15th Civil District intersects with the 16th, 19th and 14th Civil Districts of Williamson County...

In 2007, while the subdivisions Morgan Farms and Traditions were still in the planning stages, the City informed the developer, "[I]t is our understanding and belief from review of information available on water service territories in the Split Log Road area that the Morgan/Drees area is located within the Milcrofton Utility service area. The City of Brentwood has no desire or interest in providing water service to Morgan/Drees tract." (Ltr. from Mike Walker, Brentwood City Manager, Doc. No. 25-1 at PageID# 177).

The developer then contacted Milcrofton about providing water service to the subdivisions. Milcrofton responded to the request for service on July 27, 2007, with a letter from its consulting engineer, Greg Clingerman:

The above referenced project [Morgan Farms] is located within either the Nolensville/College Grove Utility District or the City of Brentwood water service area. The Milcrofton Utility Service District's boundary line runs east and west through the Morgan property approximately where the proposed McEwen Lane will be located. Since this project is located out of the district and due to the continued growth in the District the Milcrofton Utility District will not be able to provide water service to this project at this time. The District has an obligation first to provide there [sic] existing customers and future customers and proposed projects located within the boundaries of the District, adequate water service and pressure.

The District is currently in the process of upsizing water lines in the district and is currently working on construction plans for a new main water booster station. Until these future improvements are completed, within the next 1-3 years, the District cannot consider providing water service to projects located outside of there [sic] service area.

(Doc. No. 45, ¶ 5).

As part of the zoning and subdivision process, during the summer and fall of 2007, developers for Morgan Farms and Traditions submitted draft plans to the City identifying Milcrofton as the planned provider of water services to the subdivisions. On October 29, 2007, presumably after further inquiry about Milcrofton providing water service to the developments, Milcrofton's engineer, Clingerman, forwarded a copy of the July 27, 2007 email to the developer's engineer, Brad Slayden. (Id ., ¶ 7). This time, he attached a map showing the water district boundary. (Id .)

On November 13, 2007, City staff sent the developers comments to the proposed Morgan Farms development plan. (Id ., ¶ 8). The comments requested "documentation from the Milcrofton Utility District regarding their ability or inability to provide water service to this area" and "a water availability letter from the Milcrofton Utility District." (Id ., ¶ 9). Slayden responded to the City: "[T]here is indecision at this time as to whether Milcrofton Utility District or the City of Brentwood is the water service provider on this project. It seems the demarcation line between the potential providers is extremely ambiguous. We are doing our best work to achieve a resolution to this issue. As soon as the provider is determined, we will work to obtain a letter of availability." (Id ., ¶ 11).

On December 13, 2007, the engineers for the developer and Milcrofton met to discuss the water service areas. Following the meeting, Clingerman wrote a letter to the developer's engineering firm, copying Milcrofton's manager and attorney. The letter confirmed that the proposed developments were outside Milcrofton's service area. Clingerman wrote:

After our meeting of December 13, 2007 we have reviewed the original charter on the District's northerly boundary in relation to the above projects [Traditions and Morgan Farms]. When the District was formed the 14th Civil District's norther boundary did not take in the property that these two subdivisions are being proposed to be developed on. Attached is a copy of a portion of the Civil District map showing the Civil District Boundaries when the Milcrofton Utility District was chartered. Based on this information the above referenced projects are not located within the Milcrofton Utility District. Since these projects are outside the District's boundary, Milcrofton Utility District cannot provide water service to these projects.

The District is willing to serve these projects in accordance with its Water Service to Developments rule. In order for the District to serve this area, the City of Brentwood would have to authorize Milcrofton to serve this property, and Milcrofton and the City of Brentwood would need to enter into an agreement authorizing Milcrofton to service these subdivisions.

If your clients want to pursue this request, you need to request the City of Brentwood authorize Milcrofton Utility District to provide water service to these projects an obtain an agreement from the City of Brentwood to allow Milcrofton Utility District to serve these areas. Once all of this has been completed, then we will be able to proceed with discussing what improvements to the existing water system will need to be made, time frame on design, fees, etc.

(Dec. 18, 2007 Ltr. from Clingerman to Slayden, Doc. No. 25-1, PageID # 230).

In May 2008, Brentwood's Director of Water Services wrote a memorandum to the City Commission stating that "both water districts [Nolensville and Milcrofton] have confirmed the properties are not located in their service area nor do they wish to provide service to these parcels." (Milton Aff., Doc. No. 25-4). Thereafter, the Brentwood City Commission passed resolutions expressing the City's commitment to provide water service Morgan Farms and Traditions. (City of Brentwood Resolution 2008-26, May 12, 2008, Doc. No. 25-4 at PageID # 369). The resolution states that these areas were labeled "unclaimed parcels" on the accompanying map and the Court assumes this to be an accurate representation. The details of map, however, are largely indecipherable. In conjunction with the commitment to provide service to these areas, the City entered into an agreement with the neighboring Nolensville/College Grove Utility District transferred the rights to serve certain parcels as shown on the aforementioned map. (Amd. No. 1 to Service Area and Water Purchase Agreement, May 27, 2008, Doc. No. 25-4 at PageID# 372). The transfer of service area was approved by the USDA. (Doc. No. 25-4 at PageID# 375).

An economic recession stalled progress on the subdivisions for several years. During that time, Milcrofton provided water service to a new development called Breezeway adjacent to Morgan Farms. The Breezeway improvements were complete in 2009. (Doc. No. 40, ¶¶ 17-19). Construction on Morgan Farms and Traditions began in 2013 and 2016. (Doc. No. 45, ¶¶ 22, 25). Both developments were done in several phases. Water mains in Morgan Farms were complete between December 2013 and January 2018 and meters were set between January 2014 (section 1) to March 2018 (section 7)....